Counsel Corporation Announces 2002 Year End Results.Business Editors/High-Tech Writers TORONTO--(BUSINESS WIRE)--May 8, 2003 Counsel Corporation (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CXS CXS Coherent X-Ray Scattering / NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CXSN) today reported its financial results for the year ended December December: see month. 31, 2002. All amounts are stated in US dollars. During the fourth quarter of 2002, the Company adopted formal plans of disposal for its long-term care long-term care (LTC), n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. business and certain under-performing assets of its communications business. Consequently, the net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. and operations of these businesses have been reclassified as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for both the 2002 and 2001 fiscal years. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenues increased 79% in 2002 to $96.6 million from $54.0 million in 2001 due to the inclusion of a full year's operations of its retail long distance communications business acquired at the beginning of June June: see month. 2001, as well as the Company's entry into the real estate business in the third quarter of 2002. Earnings before income taxes, non-controlling interest and discontinued operations improved significantly in 2002 to $3.2 million compared with a loss of $20.0 million for the year ended December 31, 2001. This improvement reflects the Company's successful efforts to reduce costs, eliminate unprofitable businesses and streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. operations. In addition, during the year management refocused the Company on communications and real estate, two sectors it believes will produce imminent Impending; menacingly close at hand; threatening. Imminent peril, for example, is danger that is certain, immediate, and impending, such as the type an individual might be in as a result of a serious illness or accident. and sustainable growth for the Company's shareholders. The Company incurred a loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $6.5 million, or $0.43 per share, basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , in 2002 compared with a loss of $38.3 million, or $1.80 per share in 2001. Including discontinued operations, the Company incurred a loss of $25.4 million or $1.28 per share, basic and diluted, for the year ended December 31, 2002 compared with a loss of $62.2 million or $2.84 per share for the year ended December 31, 2001. "2002 has been a year of transformation and stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders as we returned to our more focused, hands-on hands-on adj. Involving active participation; applied, as opposed to theoretical: "We're involved in hands-on operations, pulling levers, pushing buttons" Arthur R. Taylor. approach of owning, operating and building businesses," commented Counsel's Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Allan Allan can refer to:
About Counsel Corporation Counsel Corporation (TSX: CXS / NASDAQ:CXSN) is a diversified company diversified company A company engaged in varied business operations not directly related to one another. A diversified company is less likely to suffer either a collapse or a spectacular gain in earnings compared with a firm concentrating its operations in a focused on acquiring and building businesses using its financial and operational expertise in two specific sectors: communications and real estate. Counsel's communications platform is focused on building upon its existing communications investments, I-Link (bus, standard) I-Link - Sony's name for High Performance Serial Bus. Incorporated and its wholly-owned subsidiary WorldxChange Corp., through organic growth and by acquiring substantial additional customer revenues. Counsel's real estate platform has a focused strategy of investing in and developing income producing commercial properties, primarily retail shopping centers shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into . For further information, visit Counsel's website at www.counselcorp.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. The statements made in this release that are not historical facts contain forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information that involves risks and uncertainties. All statements, other than statements of historical facts, which address Counsel Corporation's expectations, should be considered as forward-looking statements. Such statements are based on knowledge of the environment in which they currently operate, but because of the factors herein listed, as well as other factors beyond their control, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that may cause actual results to differ from anticipated results include, but are not limited to, obtaining necessary approvals and other risks detailed from time to time in the Company's securities and other regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. filings.
Counsel Corporation
Consolidated Statements of Operations
For the years ended December 31
(in thousands of US Dollars, except per share amounts)
2002 2001
------------------------
$ $
Revenues
Telecommunication services 90,410 49,289
Communication technology licensing 2,837 4,730
Income producing properties 3,343 11
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96,590 54,030
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Operating costs and expenses
Telecommunication costs 50,936 35,546
Income producing properties 1,448 -
Selling, general and administrative 47,059 44,350
Research and development 1,399 2,162
Provision for doubtful accounts 6,331 839
Depreciation and amortization 7,115 8,849
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114,288 91,746
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Operating loss before undernoted items (17,698) (37,716)
Gains and other income
Sale of short-term investments 28,067 42,760
Portfolio investments - 64
Sale of subsidiary - 589
Debt retirement - 1,093
Other 782 -
Impairments and other losses
Write-down of short-term investments (4,011) (1,957)
Write-down of portfolio investments (640) (19,340)
Other (722) -
------------------------
Earnings (loss) before the undernoted 5,778 (14,507)
Equity in losses of significantly
influenced companies - (5,582)
Interest income 401 2,645
Interest expense (3,002) (2,517)
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Earnings (loss) before income
taxes, non-controlling
interest and discontinued
operations 3,177 (19,961)
(Provision for) recovery of income taxes (9,655) (19,901)
Non-controlling interest - 1,538
------------------------
Loss from continuing operations (6,478) (38,324)
Loss from discontinued operations (18,949) (23,889)
------------------------
Net loss (25,427) (62,213)
------------------------
------------------------
Basic and diluted loss per share
Loss from continuing operations (0.43) (1.80)
Loss from discontinued operations (0.85) (1.04)
------------------------
------------------------
Basic and diluted loss per share (1.28) (2.84)
------------------------
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Weighted average number of common
shares outstanding (in thousands) 22,195 23,030
Counsel Corporation
Consolidated Balance Sheets
As at December 31
(in thousands of US Dollars)
2002 2001
------------------------
$ $
Assets
Current assets
Cash and cash equivalents 9,004 23,066
Short-term investments 3,071 8,932
Accounts receivable 22,184 19,376
Income taxes recoverable 3,329 2,202
Future income tax assets 274 970
Prepaid expenses and deposits 6,991 4,815
Assets of discontinued operations 2,239 8,306
------------------------
47,092 67,667
Long-term assets
Income producing properties 34,919 2,081
Properties under development 3,063 352
Loans receivable 6,473 7,305
Portfolio investments 4,420 4,219
Property, plant and equipment 12,657 15,393
Intangible assets 9,318 9,699
Assets of discontinued operations 21,598 32,172
Goodwill - 3,434
------------------------
139,540 142,322
------------------------
------------------------
Liabilities
Current liabilities
Accounts payable 7,725 5,435
Accrued liabilities 22,215 26,269
Current portion of deferred revenue 958 1,986
Revolving credit facility 9,086 6,996
Current portion of mortgages and
loans payable 3,630 2,302
Current portion of capital leases 2,714 3,034
Convertible debentures payable 2,515 -
Liabilities of discontinued operations 7,269 8,789
------------------------
56,112 54,811
Long-term liabilities
Mortgages and loans payable 22,528 3,848
Capital leases 4,146 6,986
Convertible debentures payable - 4,801
Future income tax liabilities 36,550 23,282
Liabilities of discontinued operations 11,816 13,100
------------------------
131,152 106,828
Shareholders' Equity 8,388 35,494
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139,540 142,322
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